By Andrew McKillop
1-4-14

Never Run Out Of Sand

When the semiconductor revolution started with the transistor in 1954 and the tunnel diode in 1958, and led from the 1970s and 1980s to the computer, then cellphone and tablet revolutions, the high tech geeks could crow “the world will never run out of sand” for the silicon needed to make processors and other components. But the IT revolution ran into a wall of economic, social and political reality that slowed it down more than just a little.

In fact, some economists like Robert Gordon say, this “no resource limit” revolution was a non-revolution. It probably destroyed as many jobs as it created. It speeded up the long downturn in world economic growth as much as it accelerated growth and slowed the decline. It was almost a non-event, with nothing like the impact on human wellbeing from piped water, electricity and reliable heating in every home. With a totally different set of social goals and political ways of running the economy, left over from World War II.

Gordon takes no sides in any arguments about what we can call the social economy and the political economy, but what he calls “The Blip Economy” setting in since the 1980s, replacing a long period of high economic growth and full employment by the exact reverse, is caused by the economy suffering an epic mutation and transformation of how and why it is organized and operated. Gordon only said it was all a question of once-only technological or industrial changes, and the IT revolution didn't pass muster as a world-changing event or process.

We can say and can see how the world economy was transformed since the 1980s. What we got was the dysfunctional casino-type economy run by crony government, for crony corporations starting with the banking fraternity. How or why it operates has little to do with sideshows like Peak Oil, global warming or resource depletion. They become props and excuses for the process ­ not the cause of it.

But The Finite World Is A Problem

The peaksters say that if humans use increasingly more resources, other species necessarily use less. Posted to ZeroHedge 4 January, Gael Tverberg gives us the ultimate in Green Logic, saying: “Even renewable resources are shared with other species......Solar panels covering the desert floor interfere with normal wildlife; the use of plants for biofuels means less area is available for planting food and for vegetation preferred by desirable insects, such as bees”. Tverberg goes on to give us examples of resource depletion speeding up political change, for example Egypt where its oil output has been falling like a rock, while its ungovernability rises like a rocket. The problem is that Egypt with a population above 80 million never, ever attained oil exports beyond about 500 000 barrels a day, for a short while through about 1986-1995. When oil prices were (in 2014 dollars) rarely above $18 per barrel. This placed Egypt an awful long way from “petropower and wealth”. Today it is a very small net importer of oil ­ paid for by Saudi Arabia, which also pays for its military junta rule.

Resource depletion is impossible to deny as a factor changing the economy, for sure, but its role and power in changing the social economy or political economy is likely small or absent. Tverberg says that energy and metals depletion is the most important factor changing the global economy and politics, due to what he says is less wealth being produced and available to distribute, as more wealth is needed only to extract energy and metals in sufficient quantity. The economy goes into low growth and stays there. Real wages stagnate or decline. Unemployment and homelessness rise.

This is a well-trod rationale and as a side issue can be debated a long time with no hard answers ­ but it ignores the real processes of economic crisis and social change. These act much, much faster than long-term resource and technology changes. Tverberg gives a classic example of his wrong analysis, saying that as real wages decline “Workers find that goods, such as cars, are increasingly out of their ability to pay for them, because car prices are affected by rising costs of metals and fuels”. Unfortunately for him, the world car industry is great-bad example of massive overproduction and overcapacity of production. There are too many cars chasing too few people who want them. The world iron and steel industry is in exactly the same bag. Steel prices are at record lows, because there isnt enough demand and output capacity was pumped up, for more than a decade, on the fond illusionary belief that “the growth economy” firstly existed, and secondly would go on existing. For the same reasons, cement prices are the same. The shipbuilding and ocean bulk carrier industries are the same. This problem already affects, and will soon have devastating effects on, the world cellphone industry: whatever happened to Blackberry, the President's favorite high-tech gimmick?

They produced too many. World cellphone production capacity is around 1.5 billion-a-year and there are only 7.1 billion human beings on the planet. But speculative go-go financial capital said it was a really great idea to invest in more cellphone production capacity. It said the same thing about steel and cement and giant container ships ­ and oil of course. But that was on the “upswing”. When the finance circus-economy hits its peak, the market talk suddenly makes a 180-degree turn.

Never, ever trust the casino's speakeasy “experts” who call themselves financial analysts.

The problem is the peaks and troughs got out of any rational size or proportion. What used to be called “economic cycles” (even Gael Tverberg talks about cycles) are now Himalayan mountain peaks and Mariana Trenches of the deep-deep ocean ­ about 11 kilometres deep. The real economy does not escape unscathed when modern defective and dysfunctional casino capitalism takes total control of the roulette wheels and slot machines of the world stock exchange playhouse and calls for “crisis time”. Which it does on a regular but mystical basis for its own reasons including “buying on the dip”, when industries, businesses and lives have been broken and trashed, and have chaff value, only.

Other well described and well-known reasons for this “financial crisis cycle” or mechanism exist. For example credit creation gets out of hand. Debt gets out of hand. Money printing gets out of hand. Why out of hand? Because this is Laisser Faire economics, the liberal best and only choice. We are told.

Greed and Arrogance are Infinite

Maybe not. The individual human animal could or might suffer from or play with these extremes, but human beings only exist in society. Whether this concerns Aboriginal Australians with isolated but complete nations of as few as 200 persons, to modern nation states like Japan with the single mega-city of Tokyo home to 35 million people, the diseases of human greed, aggression and arrogance are controlled and limited. The liberal laisser-faire economy however sets out on the intellectual and moral basis that human greed is infinite ­ and human responsibility to other persons doesn't exist!

Dumping this defective and disastrous, evil doctrine is therefore critically needed. Replacing it with Stalinism and the 5-year economic plan is not the only alternative, but however the change comes, it has to involve violence. Revolution is needed and unavoidable. This places us in the crosshairs of History just as much as the corporate crosshairs of Apple, Microsoft or Google selling our personal data to the NSA to satisfy their corporate greed, and then lying about it. The crony corporations can be outlawed, taken under public control and restructured. Their talkeasy smugsters can be jailed.

Proving if needed that perversity and degeneracy are the hallmarks of late-stage financial capitalism, and its logic-pack called neoliberalism, this dirt-and-dope doctrine says that stock exchange crises ­ with an inevitable huge hit to the real economy on which the parasites squat and suck ­ are due to factors including “lack of courage”. They mean the players suffer from insufficient greed! In other words, the very small numbers of active criminals who destroy the economy, each and every day, also suffer from fear.

They fear their newest game plan will fall apart. They fear they didn't find the right 5 numbers for the daily lottery. They fear they will need to borrow more, to play again tomorrow. And the day after, but we are supposed to feel sorry for these freaks ­ or at least understand their so-human predicament.

At some stage, probably very soon the casino goes into lossmaking mode, exactly like the casinos of Atlantic City or Las Vegas. This is the best moment to run the deraticization program, with no mercy on any surviving-but-maimed vermin. Governments, if they want (meaning if they have the courage) can nationalize the banks, to start with. Not just their losses! The economy can be really decentralized and split apart, to prevent the roaches crawling back in, if for no other reason. In brief, the economy can be de-financialized, and this our revolutionary agenda.

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